States Where the Most (and Fewest) People Own Homes

The dream of owning a home has become increasingly unattainable for many Americans, and the situation is not likely to improve soon, as the collapse of the housing market and the recession continue to take their toll. That is the disturbing conclusion to be drawn from the U.S. Census Bureau's newly released report "Housing Characteristics: 2010," an overview of the national home market at the end of the last decade.

One of the highlights of the report is a list of the states that have the highest and lowest percentage of homes occupied by their owners. 24/7 Wall St.'s review of the data found that homeownership rates were high in thinly populated states and those with low home prices, while homeownership was low in states with expensive homes and large cities.

For a state with a large percentage of owner-occupied homes, Delaware has a relatively high median home price of $249,400. Nevertheless, the state has one of the highest homeownership rates in the country. This partly has to do with the fact that the state’s largest city, Wilmington, has just 70,000 residents. Less than 18% of state residents live in apartments or condos, compared to a national rate of 25.9%.

Less than one-fifth of housing units are in multi-unit structures in Iowa. The state’s population is very spread out. The largest metropolitan area, Omaha-Council Bluffs, has 900,000 people, and that number is bolstered greatly by Omaha, Nebraska, which borders Iowa. The city of Council Bluffs has slightly more than 60,000 people. Des Moines, the state’s largest city, has a population of just over 200,000.

Michigan does have a large city, Detroit, which contributes to some people living in multi-housing unit buildings, as well as a relatively high state vacancy rate — two factors that negatively affect a state’s homeownership rate. These are offset, however, by the fact that the population of the city has declined dramatically and residents have moved to the suburbs. The state has one of the lowest median home values in the country, and the percentage of residents living in apartments or condos is a full 8.1 points less than the national rate.

The most populous area in Minnesota is Minneapolis-St. Paul. The Twin Cities, as they are known, comprise the state’s largest city, Minneapolis, the capital, St. Paul, and surrounding suburbs. The two cities are home to approximately 380,000 people and 280,000 people, respectively. Throughout the rest of the state, the population is spread relatively evenly.

West Virginia has the highest homeownership rate in the country, at 73.4%. This is more than 20% higher than in New York. It is likely no coincidence that the median price of a home in the state is the lowest in the country, at just $94,500. Just 12.2% of the homes in the state are in apartments or condos, compared to a national rate of 25.9%.

Rhode Island is the smallest state in the country, with a population totaling just over one million. The state’s capital, Providence, is such a large part of Rhode Island that its surrounding metropolitan area covers the entire state. The Providence metropolitan area is so large that it extends into southern Massachusetts, making its population nearly 60% greater than Rhode Island’s. Providence is also arguably the least sprawling metropolitan area in the country.

Leading up to the recession, people were moving into homes as fast as construction crews in Nevada could build them. When the subprime mortgage crisis struck and housing prices plummeted, Nevada was hit especially hard. Between 2000 and 2010, vacancy increased 49%, more than any other state in the country. The vast majority of the state’s population is located in the Las Vegas-Paradise region. Partly because of the state’s high concentration of residents in the area, nearly 30% of homes are in apartment-type buildings, compared to a national average of 25.9%.

The rate of housing units in multi-unit structures, such as apartments, is over 40% in Hawaii. The national rate is just 25.9%. The state has the highest median home value in the country, making homeownership very expensive. Additionally, approximately 70% of the state’s population lives within the Honolulu metropolitan area. Hawaii is home to the small county of Kalawao, which has a homeownership rate of just 1.4% — the lowest in the country.

Of California’s 38.3 million residents, 22.2 million live in the Los Angeles, San Diego, and San Fransisco metropolitan regions alone. Because of this concentration in large urban areas, more than 30% of Californian families live in multi-home residences (which include apartments and condominiums), compared to a national average of 25.9%. California also has the second-highest median home value in the country, which provides an incentive to rent rather than buy.

New York has the lowest homeownership rate in the country. It is also home to the densely populated New York City. An exceptional 69% of households in the city are renters. The New York metropolitan area’s population is almost as large as that of New York State because it extends into New Jersey and Connecticut.

The swing between the states with the highest and lowest homeownership is extraordinary. Just over 53 percent of the people in New York State own homes. At the other end of the spectrum is West Virginia -- with a homeownership rate above 73 percent. In addition to New York City, New York State includes the relatively large cities of Rochester, Buffalo, Syracuse, and Albany. In West Virginia, by contrast, the two largest cities -- Charleston and Huntington -- are barely cities at all. Together they have just over 100,000 people in a state with 1.9 million residents. For this article, 24/7 Wall St. has primarily considered cities' metropolitan areas, which are cities and their adjacent communities that, according to the Census Bureau, "have a high degree of economic and social integration" with the cities.

According to the report, in the last decade, homeownership in the U.S. dropped the most since 1940. The post-war housing boom lasted for over half a century as increased construction and liberal lending practices made homes affordable to a large majority of Americans. Subprime mortgages stretched that ease of availability to the breaking point. When the market collapsed, so did the ability of many Americans to own homes because of tighter lending practices and fears that the market still has much further to fall.

The pattern of homeownership will probably not change much in the years ahead. People in large cities have opportunities to rent not available in suburban and rural areas. Home prices are low in states where the number of people per square mile is low. There is little supply in these states, but their populations are not large enough to create excessive demand.

The American dream of homeownership may have peaked around 2000. Much of the U.S. population is still in a struggle with high debt and stagnant income. And job security may not return to pre-recession levels for a number of years. Even if the reasons to own a home return with rising prices, the ability to buy one may not.